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There Is Not An Annual Gift Exclusion Under Florida Medicaid Rules

The annual gift tax exclusion allows an individual to give away up to $14,000 per year (2013 limit) to as many individuals as they choose and not incur any federal gift tax liability.

Many times when I am talking with people about Florida Medicaid long-term care planning, they tell me that mom or dad have not made any gifts other than annual exclusion gifts. Therefore, they feel that the answer to the Medicaid question of have any gifts been made is “no”. However, this is not the correct answer.

Although the $14,000 gifts may be excluded for gift tax purposes, that exclusion does not extend to Medicaid purposes. This is because the IRS tax rules regarding gifting and the Florida Medicaid rules regarding gifting are not the same rules. For Florida Medicaid purposes, any transfers for less than fair market value are subject to review and possible penalties under the gifting rules. There is not an exception for the IRS $14,000 annual exclusion gifts.

Sometimes, when people realize that mom and dad’s hard earned retirement nest egg is not going to be large enough to cover the costs of long-term care they start to feel like they are caught between a rock and a hard place. Mom and dad don’t have enough money to pay for long-term care, but they have too much money to qualify for Medicaid. In an effort to help, they think that they need to start giving mom and dad’s money and assets away so they can get Medicaid and the $14,000 annual exclusion sounds like a “safe” way to do that. It isn’t. In fact gifting is probably one of the worst things that can be done to try to qualify for Florida Medicaid.

If your mom and dad, like so many moms and dads, find themselves (in most cases despite their best efforts to save for retirement) unable to pay for the costs of long-term care, don’t panic and turn to gifting. Instead seek guidance and counsel as to how the Florida Medicaid long-term care rules actually work and what other acceptable options exist for getting them the help that they need.

  • Why Choose
    Our Firm?

    We limit the number of clients that we have at one time, allowing us to focus on your case.

    Personalized Representation
  • Know the
    Benefits

    Find out if you and your family can benefit from our elder law planning services!

    More Information
  • Dedicated & Experienced

    Our firm exclusively handles elder law concerns so your family can obtain peace of mind.

    Meet Your Attorney
  • Complimentary Consultation

    Let us help. Request your consultation today and we will be in touch.

    Contact Us Now

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Edwards Elder Law, P.A.
St. Petersburg Elder Law Attorney
Located at: 2510 1st Ave. N.,
St. Petersburg, FL 33713
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Phone: (727) 755-5808
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